Accounting Ch. 6

If the cost of goods sold is $480,000 and the gross profit rate is 40%, what is the gross profit?

$320,000

Which of the following business is likely to have the shortest operating cycle?

A grocery store

Which inventory cost flow method assigns the cost of the most recent items purchased to ending inventory?

FIFO

Which inventory cost flow method assigns the cost of the most recent items purchased to cost of goods sold?

LIFO

If costs of good sold is $560,000 and its gross profit rate is 20%, what is the gross profit rate?

$140,000

Merchandise companies that are too small and do not use a perpetual inventory system may elect to use...

A periodic inventory system

If the amount assigned to ending inventory is incorrect...

Both the balance sheet and income statement are affected

Which of the following accounts would most likely appear on the income statement of a merchandise company, but not on the income statement of a service company?

Cost of goods sold

For which type of merchandise would a company most likely use the specific identification method of inventory costing?

Custom-made boats

In order to determine inventory for its balance sheet, a company must count the inventory at the end of its accounting period according to...

The periodic inventory system

Bihary Company has a beginning balance in its inventory account of $2,250 and the ending balance is $1,500. Cost of goods sold is $9,750. According to the cost of goods sold model, what was amount of inventory purchased during the year?

$9,000

Monsanto Corp. has an inventory turnover rate of 8 times. Calculate the company's average days to sell inventory

45.625

Which inventory cost flow method assigns the same cost to all units whether sold or left in ending inventory?

Weighted average cost